CE & Appliance Retailers Facing Triple Whammy This Christmas, Dan Andrew Slammed
CE and appliance retailers are facing a triple whammy this Christmas with sales tipped to be impacted by a shortage of processors, distributors with no stock and major waterfront issues that have already impacted deliveries, also set to impact retailers is the actions of Victorian Premier Dan Andrews who appears to “not give a stuff about retailers or there partners” said on retail CEO.
Another senior retail executive said there is a real possibility that there will be limited stock of gaming consoles, coffee machines, routers and TV’s that rely on a processor found in smartphones. In Asia TV manufacturers are struggling to get components after Huawei cornered the market for processors used in TV’s and certain CE goods.
Toll Holdings Australia’s largest logistic Company has even gone as far as issuing dire warnings of a looming train wreck for Australia’s $320bn retail sector in the pre-Christmas rush, with the supply chain already at breaking point with containers abandoned at wharves.
In a letter sent by Toll Global Logistics president Peter Stokes to Victorian Premier Daniel Andrews, and obtained by The Australian, the transport chief lays out the nightmarish scenario now facing the state and the country unless there is an acceleration out of stage 4 regulations around workforce levels at warehouses and distribution centres.
Mr Stokes said Toll’s warehouses and distribution centres were already close to peak season volumes and were only able to carry out primary functions under the restrictions in Victoria.
In NSW waterfront strikes are also holding up supply.
Earlier this month Wesfarmers CEO Rob Scott blasted the Andrews government for a lack of consultation around his plans to exit stage 4 restrictions. This is impacting the operations of Bunnings and Officeworks.
“In Victoria, Wesfarmers businesses employ around 30,000 team members and we have not had any meaningful engagement with the government around retail operations and nor any feedback as to whether our retail network presents any risks to the community,” Mr Scott said.
Former Myer CEO Bernie Brookes also blasted the failure to consult by the Victorian government, calling it a “scorched earth approach.’’
It could ruin Christmas for the retail and consumer good sectors, which rely heavily on the holiday season for the bulk of their profits, as goods sit on the wharf or pile up in a corner of a warehouse and then hit the stores too late in the season claims the Toll CEO.
The warnings from Toll match similar statements from supermarkets that have advised the Victorian government in sometimes heated closed-door meetings that the constricted supply chain will hurt retailers this Christmas.
Toll has now made a direct plea to Mr Andrews, detailing the blockages emerging in the nation’s supply chain that delivers everything from clothing, consumer electronics and housewares for the retail sector but will not be able to cope with the ramp-up in demand between now and Christmas. Tough restrictions on the numbers of workers allowed on site are strangling the supply chain.
He said in his letter “Melbourne is a national hub for trade across the county and is home to many warehouses and DCs (distribution centres) that service national supply chains,” Mr Stokes said in his letter.
Among the organisations affected is Synnex and Ingram Micro.
“As volumes in these facilities increase heading into the pre-Christmas peak retail season, the workforce restriction requirement is a significant risk on the supply chain’s ability to meet consumer demand.”
Toll has also complained that its biggest competitor, Australia Post, will be allowed to increase its parcel warehouse and distribution workforce at the end of the month, with Toll not able to have more workers in a shift until late October.
Toll said the tight regulations around logistics infrastructure in Victoria could force companies to rethink their investment in the state, triggering an exodus from Victoria and with it many jobs.
“The ongoing imposition of restrictions on warehouses and DCs in metropolitan Melbourne risks the long-term viability of such facilities in Victoria. With the rapid growth in e-commerce, there is heightened risk that many companies will choose to shift their national DC facilities from Victoria to other locations such as western Sydney. This would be a significant blow to Victoria’s long-time pre-eminence in the national supply chain and see the loss of many vital blue-collar jobs from the state.”